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Are the Treasures of Game Theory Ambiguous?

Listed author(s):
  • Jürgen Eichberger

    ()

    (University of Heidelberg, Department of Economics)

  • David Kelsey

    ()

    (University of of Exeter, School of Business and Economics)

Goeree & Holt (2001) observe that, for some parameter values, Nash equilibrium provides good predictions for actual behaviour in experiments. For other payoff parameters, however, actual behaviour deviates consistently from that predicted by Nash equilibria. They attribute the robust deviations from Nash equilibrium to actual players’ considering not only marginal gains and losses but also total pay-offs. In this paper, we show that optimistic and pessimistic attitudes towards strategic ambiguity may induce such behaviour.

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File URL: http://www.uni-heidelberg.de/md/awi/forschung/dp469.pdf
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Paper provided by University of Heidelberg, Department of Economics in its series Working Papers with number 0469.

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Length: 34 pages
Date of creation: Jul 2008
Date of revision: Jul 2008
Handle: RePEc:awi:wpaper:0469
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